Refund case _ cci experts please do reply

Asha (Querist) 23 September 2012 This query is : Resolved
TDS of Rs.528120 was deducted by the system on a term deposit of Rs.2.50 crore on 31.03.2005 pertaining to a University. This TDS was remitted to ITO after a week. University had not submitted any tax exemption letter / 15 H form. This deposit was matured for payment on 10.04.2006 and University wanted to renew this deposit together with interest when TDS deduction of Rs.528120 was noticed. To favor the depositor, Bank has refunded the TDS of Rs.528120 and renewed the deposit. Refund was done to the debit of SUSPENSE account as per the ORAL instructions of Regional Head of the Bank At this point of time TDS of Rs.3.50 lakhs deducted by the system on all the deposits on 31.03.2006 was not remitted to ITO till 30.06.2006.The Branch manager was transferred to another branch. He instructed the Accountant of the branch to credit Rs3.50 lakhs to SUSPENSE account where Rs.528120 refund of TDS was outstanding. When this matter was referred to a Chartered Accountant, he opined that bank cannot do such adjustments as Bank has to issue TDS certificates to investors as on 31.03.2006 and date of remittance of TDS must be mentioned in the TDS certificate and bank cannot mention the date of remittance if bank resorts to such adjustments. So amount of Rs.3.50 TDS as on 31.03.2006 was remitted to ITO belatedly. Bank has absorbed Rs.528120 in its revenue account as it cannot hold the amount in suspense account for indefinite period and claimed the amount from ITO by obtaining a letter from the University that Bank can claim this amount from ITO.This TDS refund is not yet settled by ITO. In this connection, kindly guide me on following Whether Regional Head of a bank has any discretionary powers to refund the TDS amount to the depositor to the debit of SUSPENSE account when this TDS was already remitted to ITO one year back without any proposal / planning as to how to get back the amount Whether Bank's decision to adjust the TDS of 31.03.2006 to SUSPENSE account was right Is this a procedural mistake or a FRAUD? Please offer your comments and suggestions
Thanking you in advance sir,

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venkatesh Rao (Expert) 24 September 2012
Once the TDS is remitted, TDS certificate must be given to the deductee. The fund has left the bank and I dont know how on the earth could the bank refund. The TDS so deducted is still safe custody of the IT dept. he bank must have filed returns to IT department mentioning the TDS made.

The facts reveal more than one offence.